Most pirate sites and apps won’t survive without advertising revenue. This is why the advertising industry is seen as an important partner to combat piracy.
Over the years several ad-focused anti-piracy initiatives have emerged. In the UK, hundreds of advertising agencies began banning pirate sites and elsewhere similar measures have followed.
Anti-Piracy ‘Advertising’ Agreement
One of the more prominent plans was orchestrated by the European Commission. In 2016, this resulted in a set of guiding principles and two years later several leading EU advertising organizations, including Google, officially promised to reduce ad placements on pirate sites.
The memorandum of understanding (MoU) also promised to keep a close eye on the effectiveness of the measures. And indeed, this week the EU Commission released a report documenting the progress made thus far. The same report also gives an indication of how the partnership will move forward.
“This initiative will help deprive these websites and mobile applications of the revenue flows that make their activities profitable,” the EU Commission notes, summing up the ultimate goal.
Drop in Ad Placements
While there is no data on how the revenue of pirate operators has evolved in the first year after the deal was signed, the EU Commission reports that the effect on ad placements is clearly visible in Europe. Specifically, the number of ads served per visit dropped by 12%.
“There has been a 12% decrease in the average number of ads collected per visit to IPR infringing websites following the introduction of the MoU, down from 2.02 in the pre-MoU comparison dataset to 1.77 in the post-MoU comparison dataset,” the EU Commission reports.
This is a positive outcome but at the same time, data show that the number of branded advertising campaigns increased significantly. These refer to ads that can be attributed directly to a specific brand, including well-known companies.
“Although fewer ads were found per visit, the percentage of branded advertising post-MoU has increased from 38% to 52%. The largest increases came from the UK, the Netherlands, Germany and Italy,” the report reads.
The term ‘brand,’ as used in the report, is very broad. It includes both smaller and larger EU brands that operate in a wide variety of industries. While these branded ads increased overall, ads from gaming brands and EU brands decreased.
Fewer Ads From EU Intermediaries
In addition, the number of ads that appear on pirate sites through EU intermediaries, such as advertising outfits, also decreased from 28% to 22% in the year following the signing of the deal.
The reported data comes from a study that was conducted by White Bullet Solutions, which are part of the deal as well. The company monitored ad placements on 7,627 websites from 19 EU countries, using the US as a control group.
The pirate sites offer a wide variety of content but nearly three quarter (72%) was dedicated, at least in part, to film piracy. Most of these sites were so-called linking portals, followed by direct-download and torrent sites respectively.
Overall the data suggest that there are fewer ads on pirate sites. However, what that means for their revenue is not clear. This will be the topic of a follow-up study, the EU Commission writes.
Follow-Up Study Will Look at Ad Revenue
“The second study will provide an estimation of the ad revenues collected by IPR-infringing website owners, in addition to quantifying the evolution of online advertising on IPR-infringing websites over time.”
Despite the well-intentioned efforts, these anti-piracy measures may also have an undesired side-effect. When legitimate advertising companies and brands avoid ‘pirate’ sites, the percentage of ads sourced from dubious partners may increase. Those may be more prone to misleading or harmful practices.
The EU Commission is positive about the future, however, and hopes that more and more companies will join the deal. This applies to advertise companies but also social media firms, payment providers, and others. The more companies that are on board, the more effective the measures will be.
A copy of the EU Commission’s report is available here (pdf)